Hopes dimming for postal service reform

(September 27, 2014) The U.S. Postal Service is besieged by financial losses, and the cavalry doesn’t appear to be coming.

After years of debate, Congress remains stalled on legislation to prop up an agency weighed down by heavy employee costs and still struggling to remake itself in the Internet era.

Two years ago, lawmakers worked furiously to hammer out postal legislation, negotiating up to the very end of 2012’s super-size post-election session.

But asked what the chances were for a deal this lame-duck session, Rep. Elijah Cummings (D-Md.) made a circle with his thumb and index finger and said: “Zero.”

“It’s over,” Cummings, the top Democrat on the House Oversight Committee, added before lawmakers left Washington last week.

Not everyone’s as pessimistic as Cummings: Sen. Tom Carper (D-Del.), the chairman of the Senate Homeland Security Committee, is still pushing to get his bipartisan bill considered after voters head to the polls in November.

And outside advocates like unions and industries that heavily use the mail – like banks and the paper industry – haven’t given up on a lame-duck session.

But almost everyone working on postal issues agrees that there are heavy obstacles in the way of a deal, especially since neither the House nor the Senate has passed postal legislation yet this Congress.

“There is a slender chance of something happening,” said Art Sackler of the Coalition for a 21st Century Postal Service, which represents the mailing industry. “We haven’t given up hope yet, and we’re still working on it.”

Lawmakers and outside parties can’t find a consensus on several of the most pressing issues facing the Postal Service, including a required prepayment for future retiree healthcare and whether the agency should deliver letters six days a week.

Unlike many other issues on Capitol Hill, postal reform doesn’t break down cleanly along party lines, with lawmakers from both sides of the aisle worried about how the Postal Service’s downsizing plans will affect their constituents.

Perhaps most importantly, the Postal Service’s finances have improved significantly over the last two years, blunting the momentum for negotiations and prompting some outside advocates to suggest that doing nothing is better than backing the leading proposals on Capitol Hill.

“Before there was much more a sense of urgency, and I don’t think that sense of urgency is still there,” Cummings said.

The Postal Service announced in August that it lost $2 billion in the third quarter of this fiscal year, putting its losses for the year at over $4 billion.

That red ink comes on top of a $5 billion loss in 2013. But the news wasn’t all bad for USPS: Revenues also grew 2 percent in the most recent quarter, and the recent losses are a far cry from the almost $16 billion the agency lost in 2012.

In fact, postal unions, perhaps the most fervent backers of six-day delivery, argue that USPS would be operating at a profit if not for the roughly $5.5 billion prepayment that the agency has defaulted on in recent years.

Labor officials also insist that the Internet – long blamed for the decline in first-class mail volume – is now a net winner for the Postal Service, because of the rise in the agency’s package revenues from online shopping. The mailing industry, meanwhile, is fighting a temporary increase in stamp prices.

Postmaster General Patrick Donahoe and other top postal officials have called on Congress for years to pass postal reform legislation that would allow them to limit Saturday delivery and to grow other revenue streams.

In the meantime, the service continues to expand its package delivery. USPS is about to start testing a grocery delivery program, and is delivering seven days a week in some places for the online shopping giant Amazon.

Unlike other top lawmakers working on the issue, Carper is keeping up hope that Congress can make progress on postal reform during the lame-duck session. Senate aides say Carper hopes that Majority Leader Harry Reid (D-Nev.) will show more interest in the issue after November’s elections.

“I’m encouraged to hear from Democrats and Republicans that they want to be part of the solution,” Carper said in a floor speech last week.

Carper crafted his bill with Sen. Tom Coburn (Okla.), the Homeland Security panel’s top Republican, and critics say that Carper had to yank his bill to the right to get the conservative Coburn on board.

But Coburn said last week that he had no clue what that bill’s chances were anymore.

“You need to ask Carper what his conversations have been with the majority leader,” said Coburn, who has a notoriously frosty relationship with Reid.

In the House, Cummings said that postal reform could have been more of a priority for Oversight Chairman Darrell Issa (R-Calif.), who has launched investigations into the IRS’s improper scrutiny of Tea Party groups and the attack in Benghazi, Libya.

But Cummings also said that even making USPS more of a focus might not have helped. “It was just hard to come to consensus, generally,” he said.

Issa, who’s not often on the same page with Cummings, agreed.

Now in his final weeks with the gavel, Issa has hoped that a postal deal could be a final achievement of his chairmanship. He’s even released legislation based on Obama’s own proposals for the Postal Service – which overlap quite a bit with his own – to try to gin up support among Democrats.

Issa said last week that Senate Democrats might be willing to deal on postal reform if they lose control of the chamber in November. But for now, he added that he didn’t think that his favored proposal would even make it through the House, despite estimating that 90 percent of GOP lawmakers supported it.

“Zero Democrats are willing to do it,” Issa said. “And candidly, 90 percent of Republicans doesn’t get us to 218.”